Legally Speaking (Insight On the Issues)

Compliance U

• By Peter F. Lake
• 04/01/17

As higher education has become more heavily regulated the roles of lawyers and legally trained individuals have evolved and expanded. Just 25 years ago it was unusual to have more than a single individual serving as general counsel on campus. In those days, the general counsel might have supervised compliance efforts and even some risk management efforts. Today, general counsel’s offices tend to be more heavily staffed — including working in concert with outside counsel. The general counsel’s work may be augmented also by professional compliance administrators, including as chief compliance officers. It is very common for chief compliance officers to either have a terminal degree in the study of law (J.D., etc.) or substantial experience/training in the legal dimensions of compliance. “Compliance University” means more lawyers, a more complex division of functions among the legally trained and tasked.

What are some of the more important divisions of functions among general counsels and chief compliance officers?

First, general counsel must be a practicing lawyer in good standing who possesses a J.D. and admission to at least one state bar. A chief compliance officer may possess those qualifications but does not necessarily need to them.

Second, the general counsel represents the institution and is not the client, nor a principal of the business; a chief compliance officer is a manager/administrator — and by implication does not, and cannot, represent the institution or any of its employees. If a chief compliance officer is a licensed attorney there may be some advantage in not holding an active local license so as to avoid confusion about representation of clients. Student staff or faculty may informally seek legal advice from a chief compliance officer, which they are unable to offer. It is important to protect and articulate the respective roles of the general counsel and the chief compliance officer.

Third, the general counsel performs the functions of a lawyer — such as offering advice, collaborating with clients on policy development and the formation of documents with legal implications, helping the institution clarify whether matters raise legal issues and to identify those issues, identifying trends and developments in the law, and offering input on the non-legal implications of legal advice, inter alia. The chief compliance officer, on the other hand, does not offer legal advice but instead uses legal training and knowledge to make strong managerial decisions and to lead legal compliance efforts from an internal policy perspective. The chief compliance officer typically oversees compliance staff and monitors compliance efforts. In addition, this individual identifies promising/best compliance practices, is often instrumental in identifying expert consultants and continuing education opportunities. The general counsel gives advice; the chief compliance officer gives direction.

Fourth, conversations with the general counsel may be privileged and confidential; conversations with a chief compliance officer are not. Chief compliance officers have fiduciary and other duties to share information; conversations may otherwise be discoverable. Legally trained and licensed chief compliance officers may encounter challenging situations where faculty staff or students will start a conversation by saying, “may I tell you something in confidence?”

Fifth, the general counsel will focus on the letter of the law and evidence of compliance. The chief compliance officer may focus upon the spirit of the law — the animating principles behind regulatory mandates — and will seek to achieve internalization of compliance metrics on campus. The chief compliance officer as a leader of compliance efforts must seek to find ways to motivate people to come into compliance and to understand and accept compliance metrics.

Sixth, the two functions may have differences but they share common purposes as well. The general counsel and the chief compliance officer are heavily invested in promoting the rule of law on, and off, campus. Moreover, both functions involve helping the institution to understand how external constituencies may evaluate actions of an institution. Managing public narratives and various constituencies who seek to hold higher education accountable requires substantial collaboration between the two positions.

Senior leadership in higher education must become increasingly conversant with this division of functions. Attempting to combine chief compliance function with general counsel functions risks challenges for both. Campuses that have become comfortable with certain ways of interacting with legally trained individuals may need to be retrained on how to operate effectively with individuals with legal training in distinct roles. Moreover, as legally trained individuals continue to move into higher education in greater numbers it will be important to culturalize those individuals into the unique dynamics of higher education. We must remain primarily focused upon our educational mission; all compliance efforts and legal advice are here to serve that purpose.

This article originally appeared in the issue of .